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News > Science and Tech

WWF: Banks Ignore Climate Change by Backing Risky Activities

  • Thai workers planting trees as part of a reforestation project southeast of Bangkok.

    Thai workers planting trees as part of a reforestation project southeast of Bangkok. | Photo: EFE FILE

Published 6 September 2018
Opinion

“How we use land to meet society’s needs, for example for food, clothing, paper and fuel can no longer be part of the problem. Sustainable land use must be part of the climate solution,” Stampe added.

A new report from the World Wildlife Fund (WWF) has found that the biggest banks in the Association of Southeast Asian Nations (ASEAN), have a huge potential to address climate change. The institutions' impact on environmental, social and governance (ESG) issues is enormous, but they "are slow to act on the huge potential they hold," the WWF report says.

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"Banks must take urgent steps to address key risks within the activities they finance, such as deforestation and water risk, and allocate capital to transform the region’s food, energy and infrastructure systems for a sustainable future,” the WWF’s Head of Asia Sustainable Finance Jeanne Stampe explained.

The statement highlights the importance of ecosystems such as forests in the fight against climate change and for the creation of resilience in the food and supply chains of ASEAN countries.

“How we use land to meet society’s needs, for example for food, clothing, paper and fuel can no longer be part of the problem. Sustainable land use must be part of the climate solution,” Stampe added.

The investigation bolstering the report was a collaboration between the WWF and the Business School's Centre of Governance, Institutions and Organizations of the National University of Singapore (NUS).

The study centered on 34 banks and found that most of them were aware of the social and environmental impact of their investments, but the important majority ignore any actions against climate change. No banks disclosed whether they review their portfolio exposure to climate risks nor disclosed their portfolio alignment with the Paris Agreement or the SDGs (UN Sustainable Development Goals).

The role of banks against climate change is paramount, as they must take action, which would allow "countries in ASEAN to meet their climate and sustainability commitments," Stampe said.

"They must develop and disclose detailed ESG policies and procedures, including specific science-based criteria for key ESG risks. For example, banks should implement ‘no deforestation’ policies. Banks should also be concerned about the water risk faced by companies they finance and one aspect of this is requiring their clients to commit to water stewardship,” Stampe concluded.

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